ADP: 250k Jobs Lost In November, Official BLS Jobs Report Friday

Today, ADP, a provider of payroll services to more than 24 million Americans employed in the private sector, released their monthly jobs data which showed that the economy lost 250,000 jobs in November. The expectations were for a loss of 200,000 jobs. Despite drawing from data based on 399,000 business representing about 24 million people on payrolls, ADP reports have been way off all year relative to the official government jobs report produced by the Bureau of Labor Statistics. For example, October ADP showed -157,000 jobs then a few days later October BLS showed -240,000 jobs.

Expectations for Friday’s BLS jobs report call for -300,000 jobs, which would put total year-to-date job losses at 1.5m. The report also calls for unemployment to go from 6.5% to 6.8%. Some economic estimates call for an unemployment rate of 9% in the next 1-2 years. The jobs report has a large impact on markets, and mortgage rates always move on this report since it’s such a broad measure of the economy, covering consumer strength, unemployment and wage inflation.

We think rates will drop on a combination of weak jobs and the Fed buying $500b in mortgage bonds.